Development of two airplanes–the Airbus A330neo and a replacement for the Boeing 757–may be pushing to the forefront, according to two news articles yesterday.
Reuters reports that a decision whether to proceed with the Airbus A330neo could come before the Farnborough Air Show, even if a formal launch isn’t announced at the international event next month.
Bloomberg reports that Boeing may be nearing the launch of a 757 replacement sooner than expected.
We’ve written extensively about both prospective airplanes, with the A330neo concept one of many subjects from the Airbus Innovation Days. The Reuters article reports what we have been hearing for some time: the airplane could be announced at Farnborough–but it might not be, either. What is new is the increasing likelihood Rolls-Royce will become the sole-source supplier. Aviation Week originally reported this prospect.
Our Market Intelligence suggests that RR will supply the Trent 1000 TEN incorporating elements of the Trent XWB to improve fuel burn and reduce weight. Airbus is also going to have new, composite nacelles to further reduce weight and improve efficiency, according to our Market Intelligence. Incorporating sharklets will add a few percentage points of fuel savings to the long-range cruise. We’re skeptical of the estimated 14%-15% fuel savings claimed in the Reuters article–this number, if it is achieved, would have to come for the longest range rather than the 2,000nm Airbus likes to promote as an average mission.
We concluded last December that Airbus must proceed with the A330neo. Our A330neo Study points out that Airbus faces a production imbalance with Boeing beginning in 2016, as demand for the A330ceo declines and Boeing ramps up production of the 787. Without an A330neo, by the middle of the next decade, Boeing would have two-thirds of the medium, twin-aisle production market, adjusted for ramp ups in the 787, 777X and A350 programs and declines in the A330ceo and 777 Classic lines.
Even with an A330neo, we believe Airbus will reduce production rates beginning in 2016. We predict Boeing will reduce rates for the 777 Classic beginning in 2017.
Our Study also concludes that Airbus pricing for the A330neo will be aggressive vis-a-vis the 787-8/9. With the A330 line essentially paid off and only about $2bn in incremental R&D cost for the A330neo (most of which likely to be paid by the engine OEM), Airbus’ ability to drop the price of the A330neo will far outstrip Boeing’s ability to match, unless Boeing prices for market share rather than profit.
As we reported in our Innovation Days postings, one trade Airbus has to consider is engine maintenance cost. Officials say the A330ceo, with a highly mature engine, has lower maintenance costs than the 787’s new GEnx and RR engines. The 787’s nacelles, with highly advanced materials, are said to be very costly to maintain and overhaul, according to Market Intelligence. Airbus acknowledged to us that this maintenance delta will narrow considerably for the A330neo.
The 757 replacement is another topic we’ve discussed at length. We don’t doubt the accuracy of Bloomberg’s reporting, but we are skeptical that Boeing is preparing to make an announcement soon. We’ve not checked with our sources for a few months on this issue, but the timing we were told then was that a 757/737 replacement family would not be launched until the 777X enters flight testing in 2018 or 2019, with EIS in 2025/2027; we’re reported this before.
Boeing is in a more precarious position than rival Airbus. The 737-9 doesn’t match up to the A321neo (and sales figures certainly support this) and neither is as good on long-range missions as the 757. The 737 family has been updated probably as far as it can go with the MAX, say customers and others, so a new family is required–sooner than later, the thinking goes.
Although Airbus continues to state it doesn’t plan a new, clean-sheet airplane for a 2030 EIS, if Boeing launches a new set of airplanes in 2018, we believe Airbus will have no choice but to follow. This is probably why Airbus is looking at system upgrades to the neo for an EIS of around 2018, according to Aviation Week and market sourcing. We don’t believe this will be competitive, however, with a clean-sheet Boeing design.